Looking at the top 50 hedge fund hotels, it's probably little surprise that Amazon (NASDAQ:AMZN) and Facebook (NASDAQ:FB) top the list, with Amazon making for a top 10 holding in 61 funds, and Facebook in 57.

Looking at another gauge - the percent of market cap owned by hedge funds - shows CommScope (NASDAQ:COMM) leading the way, with hedge funds owning 37%. Next is Dell Technologies (NYSE:DVMT) and Expedia (NASDAQ:EXPE) at 30%, and after that: Liberty Broadband (NASDAQ:LBRDK) at 24%, LinkedIn (NYSE:LNKD) at 21%, Constellation Brands (NYSE:STZ) at 20%, and Humana (NYSE:HUM) and WhiteWave Foods (NYSE:WWAV) at 19%.

The European Commission is questioning the United States about a secret court order linked to reports that Yahoo (YHOO+0.7%) scanned thousands of customer e-mails on behalf of the government.

The questions come amid concern that such an order might violate the Privacy Shield agreement reached in August, where the U.S. agreed to limit collection of (and access to) Europeans' data held in the U.S.

Now the EC is asking how a Yahoo order would fit with those commitments, and whether such a program is still under way.

"The U.S. will be held accountable to these commitments both through review mechanisms and through redress possibilities, including the newly established Ombudsperson mechanism in the U.S. State Department," said EC spokesman Christian Wigand.

Late last month, the group of European data-protection authorities known as the Article 29 Working Party cautioned Yahoo over the government access issue, as well as the company's huge 2014 data breach.

Some Yahoo (NASDAQ:YHOO) employees were aware that a state-sponsored hacker had breached its network shortly after a massive hack in 2014, casting a larger shadow over Verizon's (NYSE:VZ) $4.8B deal to acquire the company.

Yahoo said in September that an investigation in August had uncovered the theft of personal information associated with at least a half billion accounts, the largest data breach in history.

Along with a warning to WhatsApp (earlier), European data-protection authorities have cautioned Yahoo (NASDAQ:YHOO) over its huge 2014 data breach as well as reports of government access to Yahoo accounts.

The Article 29 Working Party (a coalition of 28 EU privacy watchdogs) has asked Yahoo to communicate all aspects of the breach to EU authorities, to notify users of "adverse effects" and cooperate with all upcoming investigations -- and it appears there will be investigations. More discussion will come from the regulators next month.

"The reports (about email scanning) are concerning to WP29 and it will be important to understand the legal basis and justification for any such surveillance activity, including an explanation of how this is compatible with EU law and protection for EU citizens," WP29 wrote to Yahoo.

That doesn't mean Verizon doesn't still need more information about the intrusion, says Walden, the president of Product and New Business Innovation, speaking at a WSJ conference.

"The reason we wanted to get this asset is we wanted to increase the audience scale that we had at AOL," she says. "So it very much makes sense, but what we have to be careful about is what we don't know ... we're working closely with that team to try and better understand. And so I've got an obligation to make sure that we protect our shareholders and our investors ... so we're not gonna jump off a cliff blindly."

"We're hoping that in the next 60 days or less that we can have an outcome," she adds, "but right now they're conducting the investigation and will be providing us information."

Can she think of a scenario that would make Verizon walk away? "Why don't we move on to your next question?"

That's because the details of the order are apparently a sensitive national security matter, and officials said releasing any declassified version of the order in the foreseeable future isn't likely either.

More than 30 advocacy groups are writing Director of National Intelligence James Clapper today asking for declassification of the order, saying such an order violates Title I of the Foreign Intelligence Surveillance Act.

On Verizon's (NYSE:VZ) Q3 earnings conference call, retiring CFO Fran Shammo recapitulated a company line on the data breach at Yahoo (NASDAQ:YHOO), saying he did expect the intrusion could have a "material impact" on a $4.83B takeover deal.

"This was an extremely large breach that has received a lot of attention from a lot of people," he says, noting the lawyers had their first call yesterday "but that's going to be a long process."

Upgrade activity was affected by both short supplies of iPhone 7 as well as the recall of Samsung's Galaxy Note 7 devices, Shammo and incoming CFO Matt Ellis said. Meanwhile, when it comes to pricing, "unlimited is still not something we're going to move to."

The company is negotiating with one party on a sale of its data centers, Shammo says.

User engagement measured as viewing time on its video service Go90 is up, now past 30 minutes per user each day, with less than 20% of the traffic served on Verizon's network.

Shares are off 1.8% premarket with the call still ongoing. YHOO -0.2% premarket.

Yahoo (NASDAQ:YHOO) is up 2.5% today, just 4.8% below last month's 52-week high, after it posted profits that beat expectations in Q3 and analysts mostly looked past them to a pending buyout by Verizon (NYSE:VZ).

Considering the lack of comment from Yahoo management, the results are likely to be overshadowed by Verizon's commentary when it delivers earnings tomorrow, analysts agree.

Nomura raised its price target to $45, from $39, to reflect appreciation of the company's stake in Alibaba. Analyst Anthony Di Clemente believes Verizon would be hard pressed to show material adversity for the deal, based on similar past events, and the Yahoo results aren't likely to add any pressure there.

An implied discount on Yahoo's Alibaba stake has increased since Verizon commented on Yahoo's breach, says SunTrust Robinson Humphrey's Bob Peck, who has a Hold rating and $42 price target. But the key question tied to the Verizon deal is whether Yahoo could even open up the process again to new bidders, he says.

Morgan Stanley (Equal-Weight, $42 price target) and Oppenheimer (Outperform, $53) agree that any risk to the deal is overshadowed by the fact that Yahoo's basically a trading vehicle for the Alibaba stake, so BABA bullishness can outweigh any M&A concerns.

Yahoo yesterday guided to Q4 revenue (ex-TAC) of $880M-$920M, below estimates for $938M, and to adjusted EBITDA of $260M-$300M (above a consensus for $245M).

Mobile revenue jumped 46.1% to $396M, while desktop revenue inched up to $854M from $844M.

The company had said it wouldn't hold a call to discuss the earnings due to its pending buyout deal with Verizon (NYSE:VZ).

"I am pleased with our Q3 results," says CEO Marissa Mayer. "This quarter, we launched several new products and showed solid financial performance across the board; both are a testimony to the tremendous teamwork, focus, and resilience of our employees," she added, noting the company is working hard to retain user trust after its data breach and ahead of the Verizon integration.

Needham has cut Yahoo (NASDAQ:YHOO) to Hold with talk in the air of Verizon (VZ-0.4%) potentially walking away from its deal to buy the Internet business, or getting a lower deal price.

But valuation also plays a part as the firm reduces its rating to Hold from Buy, as does Yahoo's cancellation of its Q3 earnings call, which "also troubles us." Yahoo's up 1.5% today to $42.40, above Needham's $40 price target.

Last week, Verizon's general counsel was quoted as saying there was a "reasonable basis" to think that the massive 500M-account data breach at Yahoo would prove material to Verizon's $4.83B deal to acquire it.

Yesterday, Credit Suisse set a price target of $52 on Yahoo shares (implying 23% upside), and MKM Partners boosted its price target to $51 from $44.

Yahoo reports after the bell today, but won't hold a conference call because, it says, of the pending acquisition.

Verizon (NYSE:VZ) General Counsel Craig Stillman has raised alarm bells over the company's $4.83B deal to buy the Internet business at Yahoo (NASDAQ:YHOO) in saying that a "reasonable basis" exists to believe a massive user data breach at Yahoo is material to the takeover deal.

Late last month, Yahoo confirmed a breach that happened two years ago that it believe affected 500M user accounts. And earlier this month a Reuters report said the company built a secret program to scan incoming user mail at the behest of the U.S. intelligence community.

The breach could trigger a clause allowing for Verizon to get out of the deal, Stillman says.

"I think we have a reasonable basis to believe right now that the impact is material and we're looking to Yahoo to demonstrate to us the full impact," he said. "If they believe that it's not, then they'll need to show us that."

The general counsel at Verizon (NYSE:VZ) is now saying there's a "reasonable basis" to believe that a massive data breach at Yahoo (NASDAQ:YHOO) had a material impact on Verizon's $4.83B takeover agreement, Reuters reports.

A civil liberties group with experience working civil rights and surveillance issues with Web companies has called on Verizon (VZ+0.7%) to improve user protection at its acquisition target, Yahoo (YHOO-1%).

"Verizon has a long way to go to establish trust with millions of users who now know Yahoo as inattentive to their rights and security," Access Now says. "Implementing these measures will serve as first steps."

"We have an ongoing and constructive engagement with Access Now and will review their recommendations and consider them carefully," Verizon said in a statement.